Phone hacking: James Murdoch faces second grilling by MPs

James Murdoch is likely to be recalled to parliament to answer fresh questions after two former News of the World executives said on Tuesday they were certain Murdoch was told of an explosive email that indicated phone hacking at the paper went beyond one rogue reporter.

Commons sources said Murdoch would probably be ordered to appear for a second time before MPs next month to clarify whether or not he was told about the now-notorious "for Neville" email, which blew apart the newspaper's defence that phone hacking was isolated to its royal editor, Clive Goodman.

In a tense session before the culture, media and sport committee, Tom Crone, who left as News Group Newspapers' legal manager in August, said he had told Murdoch about the email. It was after hearing the news of the email at a 15-minute meeting in 2008, he claimed, that Murdoch authorised a payment of £425,000 plus costs to Gordon Taylor, a football executive. This contradicts James Murdoch's account of events.

Giving evidence at the same session, Colin Myler, who became editor of News of the World after Andy Coulson resigned over phone hacking at the paper, said it was "inconceivable" that Murdoch was unaware that the email indicated hacking went beyond a single rogue reporter at the Sunday newspaper.

Myler said: "I had made the point very clearly in my opening statement to that hearing that the 'for Neville' email was clearly a significant development."

Murdoch responded to Crone's claims in a statement, insisting he stood by his earlier testimony to the select committee. He said his "recollection of the meeting regarding the Gordon Taylor settlement is absolutely clear and consistent".

"I was told by Mr Crone and Mr Myler ... that there was evidence that Mulcaire had carried out [the interception of Mr Taylor's voicemails] on behalf of the News of the World. It was for this reason alone that Mr Crone and Mr Myler recommended settlement ... They did not show me the email, nor did they refer to Neville Thurlbeck [the NoW reporter to which the email allegedly referred] ," he added. "Neither Mr Myler nor Mr Crone told me that wrongdoing extended beyond Mr Goodman or Mr Mulcaire."

His statement is at odds with the evidence given to the committee by Crone. "[The email] was clear evidence that phone hacking was taking place beyond Clive Goodman. It was the reason we had to settle the case and in order to settle the case, we had to explain the case to Mr Murdoch and get his authority to settle, so clearly it was discussed," he told MPs.

"Since he gave us the authority we were asking for, I would take it that for the first time he realised News of the World was involved [in illegal voicemail interception] and that involvement involved people going beyond Clive Goodman," Crone added.

Until April of this year, News International claimed hacking was limited to Clive Goodman, the News of the World's former royal reporter imprisoned for illegal voicemail interception in 2007 along with private investigator Glenn Mulcaire.

The existence of the "for Neville" mail was first revealed by the Guardian in July 2009. It appeared to show that the NoW's chief reporter, Neville Thurlbeck, was also implicated in hacking.

The fact that a transcript of Taylor's voicemail messages were passed back to the NoW, where they were transcribed by a junior reporter and returned to Mulcaire, implied there was wider knowledge of hacking within the newsroom.

Crone also told the committee on Tuesdaythat Coulson had wanted to rehire Goodman after he was released from jail. He claimed Coulson had told him he hoped to "persuade" Hinton that he could come back, not as a reporter but as a subeditor or book "filleter" or editor.

Myler and Crone testified to MPs as Lord Justice Leveson opened his inquiry into media practices and ethics. It emerged that Rebekah Brooks as well as a number of victims of media intrusion, including Madeleine McCann's mother, Kate, have offered to give evidence to the inquiry.

In separate evidence to the Commons liaison committee David Cameron conceded he became too close to NI executives and said he could "not guarantee that [he had] got absolutely right" his declaration of all meetings because it was difficult to recall all social occasions.

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